Property sector's go-to guy

As chairman and president and founder of CB Richard Ellis Philippines, considered by many as the leading real estate advisor in the Philippines, Rick Santos is the go-to person when it comes to feeling the pulse of the property sector.

CBRE, the local arm of CBRE which is acknowledged as the world’s largest real estate services provider, offers the most comprehensive array of services in the industry including real estate sales, leasing, tenant representation, office services, investment sales, property management, facilities management, asset management, project management, research and consulting, valuation services, and technical services.

But there is more to Rick than real estate. Little known is the fact that he was a former rugby professional who played for University of California at Berkeley, the Harlequins in London, and for Oxford University. Rick also sits as secretary general of the Philippine Rugby Football Union, the governing body of rugby sports in the country.

Let’s get to know more about Rick, his life, work, and other passions in life.

• How did your involvement in the real estate begin?

As a kid I always loved cities and the built environment. I was always interested in helping to bring overseas companies into the Philippines.

• How does the Philippine real estate sector compare to that of its neighbors?

The Philippine real estate sector will remain upbeat in the year of the water dragon. We see sustained growth in the BPO/office, residential, and gaming and leisure sectors in 2012. The Philippines is one of the most-cost effective BPO and office destinations in Asia. The Philippine BPO sector will continue to thrive in 2012. The country provides a conducive environment for foreign investors – an excellent pool of skilled labor, outstanding customer service, and one of the cheapest rental rates and highest yields in Asia.

• You seem to be very optimistic about the prospects of the sector this year and in the years to come. What is the basis of this optimism?

This is the best real estate market I have seen in the Philippines in the last 20 years. The confidence in the Philippines from an investment standpoint is very high. Strong macro-economic fundamentals combined with an amazing confluence of events surrounding: renewed confidence in the country’s leadership, strong macro-economic fundamentals, a world class cabinet, record low interest rates, the outsourcing and BPO sector creating four million sq.ft of new office take up a year, the gaming sector taking off like Macau and Singapore, record tourist arrivals, an influx of budget airlines, remittances up, a strengthening currency, huge interest in the Mining sector, US/Phil relations back on track and the Philippine stock market at an all time record level. Moreover, recent problems in China have caused international investors to look outside China and closely at countries like the Philippines and India. The Philippines is really shaping up to be the India of South East Asia for the BPO and outsourcing companies.

• Any dangers that lie ahead that developers and consumers should watch out for?

I would encourage all developers to embrace sustainable development and green development. An excellent example would the Zuellig building in Makati which is a pre-certified Leed Gold office building in the heart of the Makati CBD. The Zuellig building really epitomizes the Philippines as a world-class player in the office sectors along with the Big Players like: Ayala, Megaworld, Robinsons, SMDC, Filinvest, Federal Land,Eton, Daiichi,etc..

• Are you still actively involved with AmCham? What are the current concerns of American businessmen/investors about the Philippines? (Rick Santos was the youngest and first Filipino-American to be elected president of the AMCHAM Philippines (2004, 2006, 2008); he is currently the vice-president of AMCHAM Philippines.)

The BPO sector and the outsourcing of US companies only continues to accelerate – especially in the banking sector.

• Please tell us a little about yourself.

I was born in the Philippines and grew up in the US. My father was an Ateneo Fulbright Scholar from Zamboanga who worked as an academic and a real estate investor and my mom was a Peace Corp volunteer.

• What’s the current office sector supply/demand situation in key central business districts (CBDs) in Metro Manila? How about residential? What’s your expectation this year and next year?

The office sector is performing well with demand mainly driven by the expansion of existing and entry of new outsourcing and off-shoring companies. Most buildings are being leased out even before completion date. Vacancy rates of offices are very low with all the major business districts having more than 96 percent occupancy rates.Vacancy rates in Makati are at 3.43 percent while in Fort Bonifacio, vacancy rate is at 2.96 percent.

• Is investing in condominiums still a good investment especially for OFWs? Is it a good time to buy property?

Condominiums in general are still a good investment since it can function either as an income generating asset or a functional asset if used by the OFW’s or their families. It is a good time to buy properties because of the flexibility offered by developers and lending institutions. Interest rates on housing loans are at an all-time low and payment schemes are being stretched to accommodate longer payment periods.

• Is there any danger of a repeat of the 1997-1998 real estate debacle?

There is no danger of another real estate bubble similar to the 1997-1998 period because the market is working based on real demand. Developments are based on actual end-user demand, far from the speculative market 1997-1998.

• What are your thoughts about green development?

Green buildings are taking off in the country and are becoming an accepted practice. It is good for the country as a whole. If you look at what’s happening in the West, green buildings are becoming not just an exception. It is becoming a norm that many multinational companies are favorably looking upon, if not requiring to get a LEED/BERDE certification.

• Are you into sports? How do you spend your weekends?

(Rick has been at the forefront of promoting rugby even before he founded CBRE Philippines in the early 90s. By 2008, CBRE Philippines, through Santos’ efforts, put a lot of emphasis on bringing youth rugby to a bigger venue and as since been an integral part of CBRE Philippines corporate social responsibility program.)

The Philippine Volcanoes’ unprecedented win in the recently concluded HSBC Asian 5 Nations Division 1 Tournament is a historic high for the country. Beating Singapore, Chinese Taipei, and Sri Lanka, the Philippine team is now ranked 55 from its previous 66 and will be promoted to the top 5 teams competing in the A5N Elite Level in 2013 alongside powerhouse teams Japan, Hong Kong, UAE, and Kazakhstan.

The Philippine team (Volcanoes) is one of the most successful teams in Asia and we are proud of their recent win at the A5N. Through their remarkable success, we hope to further promote the sport in the country and develop more players at the grassroots level. We’ve got hundreds of kids now playing rugby in the country. We plan to bring it into the thousands.

I thought it would be good for a lot of kids at Bahay Bata and Tuloy Foundation to channel their innate athletic abilities. By holding the CBRE Juniors, we hope that some of these boys and girls, will be good enough to play in the Philippine team in 10 years’ time.

[Rick is also coach for Makati Mavericks, a voluntary youth rugby training team/camp he founded which trains every Sundays at the Colegio San Agustin.]